The story of the Music Industry versus The World hardly needs to be recounted, but here's the last decade in a nutshell: 1) Internet connections grew in number and speed, 2) people figured out how to compress music files and "share" them online, 3) services like Napster and Kazaa sprouted up and provided an organized platform for "peer-to-peer" ("P2P") file-sharing, 4) copyright owners like the Recording Industry Association of America ("RIAA") noticed that sales were dropping, and attributed the drop to file-sharing, 5) the RIAA et al. started suing both "end users" (the actual students/working adults/living and deceased grandmothers transmitting the offending files) and P2P intermediaries like Napster for copyright infringement, 6) content owners achieved some notable victories against these intermediaries in federal court and eventually decided the user-by-user litigation strategy was ill-advised, 7) content owners began to recognize that the industry would have to change in a dramatic way in order to remain viable in the Internet era, 8) the content industries, venture capitalists, and other "stakeholders" put their heads together to figure out just what that "dramatic change" should look like, and 9) they figured it out, and the music industry lived happily ever after[update forthcoming.]

To be precise, the courts refer to this first type of secondary liability as "vicarious liability," a very old legal principle grounded in the notion that a "master" should not be allowed to profit from wrongdoing by his "servant" merely by turning a blind eye to that wrongdoing. To grossly oversimply (this is just a blog, after all), "right to control the infringement + profit = vicarious liability."

The post-Grokster legal landscape is decidedly anti-intermediary; perhaps as a result, some copyright owners now have their sights set on the ultimate "gatekeepers" in the 21st Century: Internet Service Providers, or "ISPs."

So how does all of this relate to fashion? Well, as an initial matter, secondary liability is a major arrow in the quiver of trademark owners as well as copyright owners -- and as we've seen, when it comes to fashion designs, trademark protection is where it's at. As a result, lawsuits have already been brought -- albeit with mixed results for trademark owners -- against intermediaries like eBay that have (whether knowingly or not) provided a platform for selling counterfeit versions of luxury goods.

But if Senator Schumer's "Innovative Design Protection and Piracy Prevention Act" becomes law, one might naturally wonder whether a whole new batch of intermediaries (for instance, department stores who stock infringing clothing designs) will find themselves on the hook -- not for trademark, but rather for copyright[-like] infringement. (The bill would actually create sui generis, copyright-like protection for certain "unique" fashion designs -- not "copyright" protection, per se.)

[N.B. Any views expressed here are solely those of the writer, and are not stated in the writer's capacity as Co-Chair of the American Bar Association's Subcommittee on Fashion Design Legislation.]

Furthermore, the Schumer bill would actually tack on its proposed fashion-specific provisions to the existing "Vessel Hull Design Protection Act" (a chapter that immediately follows but is not technically part of the U.S. Copyright Act), which likewise assumes the possibility of secondary liability. That assumption is evidenced by the VHDPA's safe harbor for retailers and distributors that have dealt in infringing goods, but haven't 1) "induced" or "colluded" to make or import the infringing article, 2) withheld the source of the infringing article, or 3) reordered the infringing article after having been notified of its illegality.

Just as an exercise, put yourself in Barneys'place for a moment: if you received an official, scary letter from the law firm representing, say, Polo Ralph Lauren, claiming that a handful of garments by, say, upstart designer Greg Lauren were infringing, would you keep the goods in question on the shelves while you conducted a thorough investigation? Would you conduct an investigation at all? What if you weren't Barneys, but rather a small boutique without a savvy attorney on retainer? You'd probably just take the stuff off the shelves, wouldn't you?

As any reader who has made it this far in the post has likely gathered, secondary liability is a legal principle largely defined by case law. Case law results from litigation. Litigation is expensive. That doesn't mean the Schumer bill shouldn't become law -- or that it should -- but to echo LOF's last post discussing the legislation, anyone who wishes to have an informed view about the bill's merits must consider the possibility that a number of expensive disputes may have to be litigated before the contours of retailer and/or distributor liability for fashion design infringement are clearly delineated.

[One more time: this post is not legal advice or a substitute for legal advice; no attorney-client relationship has been formed as a result of this post; views expressed herein are not necessarily those of the ABA, or of any individual or entity besides the author; insert any other necessary disclaimers here; actually, you would be better off never having read this post at all; you should probably just leave; now.]

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